DuPont Decomposition
Why does JARO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
30.1% = 20.5% × 0.91 × 1.61
Latest: FY2025
Profitability
Net Margin
20.5%
39.3% →20.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.65x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.61x
2.09x →1.61x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 23.0 pp over 4 years. Driven by net margin declining (39.3% → 20.5%), asset turnover improving (0.65x → 0.91x), leverage falling (2.09x → 1.61x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 39.3% | 0.65 | 2.09 | 53.1% |
| FY2023 | ₹0Cr | ₹0Cr | 9.5% | 0.69 | 2.26 | 15.0% |
| FY2024 | ₹0Cr | ₹0Cr | 19.1% | 0.99 | 1.72 | 32.4% |
| FY2025 | ₹0Cr | ₹0Cr | 20.5% | 0.91 | 1.61 | 30.1% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.